Payments of Ordinary Annuities Ryan wants to get together $40 000 to purchase the first house in his housing empire. He does the math, and he begins making regular quarterly deposits into a savings account that earns 8.5%, compounded quarterly, for 5 years. What must his regular deposits be in order to achieve his goal of saving $40 000 in 5 years?

Payments of Ordinary Annuities Ryan wants to get together $40 000 to purchase the first house in his housing empire. He does the math, and he begins making regular quarterly deposits into a savings account that earns 8.5%, compounded quarterly, for 5 years. What must his regular deposits be in order to achieve his goal of saving $40 000 in 5 years?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

You have $1,000 today in your savings account. How long must you wait for your savings to be worth $2,000 if you are earning 0.25 percent interest, compounded annually? years (XXX.XX years) You want to have $40,000 for a down payment on a house 4 years from now. If you can earn 3.95 percent, compounded annually on your savings, how much do you need to deposit today to reach your goal? ($xxxx.xx)
You would like to have $37,000 in 5 years for the down payment on a new house following college graduation by making deposits at the end of every three months in an annuity that pays 4.25% compounded quarterly. How much should you deposit at the end of every three months? How much of the $37,000 comes from deposits and how much comes from interest?
The Jones want to save $95,000.00 in 5 years for a down payment on a house. If they make monthly deposits in an account paying 5% compounded monthly, what is the size of the payments that are required to meet their goal?
Lola Fritola is planning for her retirement by making quarterly payments to an annuity with each payment increasing by 0.4% every quarter. Her first payment is $5,100 and she plans to contribute for the next 1O years. How much will she have in her retirement savings if the money is invested to earn 4.2% compounded quarterly? (Round your final answer to 2 decimal places.) Retirement savings %$4
Abby Ellen wants to attend Ithaca College. She will need $75,000 6 years from today. Assume Abby's bank pays 6% interest compounded semi-annually. What must Abby deposit today to have $75,000 in 6 years?
You need to have $18,000 to pay for your car in 7 years. How much do you need to deposit today in a bank that pays 5% interest, compounded annually, in order to achieve your goal?
Juan has a goal of saving up $56,397 by making biweekly (26 per year) deposits into a savings account for the next 9 years. If the account has an annual interest rate of 0.6%, how much should each of his deposits be? Round your answer to the nearest dollar.
At the end of 5 years from now, your friend wants to have $225, 000 saved for a down payment on a house. He expects to earn 5%-compounded monthly-on his investments over the next 5 years. How much would your friend have to put in his investment account each month to reach his goal?
How much Alex must deposit annually if he wants to have $800,000 in 25 years by making equal annual end-of-the-year deposits into an account paying 6% interest annually.
You put $2,000 in an IRA account at Northern Trust. This account pays a fixed interest rate of 8% compounded quarterly. How much money do you have in five years? Holly wants to have $200,000 to send a recently born child to college. She sets up a 529 plan and wants to know how much she must invest at the end of each year for the next 18 years if the funds can earn 5 percent.
Mike Gioulis would like to have $24,000 in 4 years to pay off a balloon payment on his business mortgage. His money market account is paying 1.825% compounded daily. Disregarding leap years, how much money (in $) must Mike put in his account now to achieve his goal? Round to the nearest whole dollar.

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